Coal mining in Russia

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Coal exports from Russia

• Coal exports from Russia

2024

The share of unprofitable companies in the coal industry in Russia exceeded 50%

In Russia, the share of unprofitable companies in the coal industry in January - April 2024 reached 52.4%. That means more than half of the sector's businesses are operating at a loss, the highest since December 2020. In the first four months of 2024, the profit and loss balance of coal companies amounted to 14.3 billion rubles, which is almost 15 times less than in 2023. Such data were released in July 2024.

According to Vedomosti, in the same period in 2023, the share of profitable enterprises in the coal industry was 67.3%, and unprofitable - 32.7%. In January - April 2022, these indicators were 79.4% and 20.6%, respectively. Thus, in two years, the share of unprofitable companies increased 2.5 times. A significant drop in profitability is associated with a sharp decrease in export prices for coal and an increase in logistics costs.

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Export prices for Russian thermal coal, which accounts for 85% of the total supply, reached lows from 2021 in early April 2024. According to the Center for Price Indices (CDC), the cost of coal with a calorie content of 6,000 kcal/kg on the basis of FOB Far East amounted to 95 dollars per ton, having decreased by 6% since the beginning of 2024. In the port of Taman, the price of coal of the same calorie content fell by 13% to $72 per ton, and in the ports of the Baltic Sea - by 14% to 61 dollar per ton.

Deputy Minister of Energy Sergei Mochalnikov said that the marginality of the business of coal companies in Russia is "near zero." The main reasons for the deterioration in financial indicators are an increase in railway tariffs for the transportation of coal, an increase in rates for the provision of gondola cars and an increase in tariffs for transshipment of coal in ports.

In June 2024, operators of coal terminals in Russian seaports began to increase tariffs for transshipment. According to the Argus agency, the cost of coal transshipment has increased in the port of Ust-Luga in the Leningrad Region and in the port of Vostochny in the Primorsky Territory.^[1]

2023

Coke production in Russia increased by 1.2% to 25.7 million tons

In 2023, coal coke and semi-coke production in Russia reached 25.7 million tons. This is 1.2% more compared to the previous year, when the volume was estimated at 25.4 million tons. Such data are reflected in the BusinesStat review, published at the end of July 2024.

It is noted that the key consumers of coal coke in the Russian Federation are metallurgical enterprises. At the same time, most of the products produced in Russia are used within the combined groups of companies. Among the leading coke producers are Ural Steel JSC, Altai-Koks JSC, Cox PJSC, Mechel-Koks LLC, Gubakhinsky Koks OJSC and Moskox JSC.

In 2019, the volume of coke production in Russia was about 26.9 million tons. In 2020, an increase of 0.3% was recorded - up to 27 million tons, and in 2021 the increase was 3.6% - up to 28 million tons. In 2022, a decline of 9.3% followed with a final result of 25.4 million tons. This is due to the deteriorating geopolitical situation. In April 2022, countries European Union introduced a ban on the import, purchase or transit of coal and other solid fuels from minerals the Russian Federation, including coke and semi-coke. In addition, there were difficulties with transportation and mutual settlements. In addition, metallurgical plants have reduced coal coke consumption due to a decrease in metal consumption in the domestic market and a decrease in export supplies of iron and steel products.

The report says that in 2023, coal coke imports to Russia amounted to 48.3 thousand tons, which is 23.8% lower compared to 2019 (63.3 thousand tons). In general, the role of imports in the domestic coke market is insignificant. At the same time, in 2022-2023, the supply of these products from China was actively growing. If earlier exports from this country were absent or were insignificant, then at the end of 2023, the share of coke from Chinese-made coal amounted to 96% of the total fuel supplies to Russia.^[2]

Reduction in coal production by 1.26% to 438 million tons

In 2023, Russia mined 438 million tons of coal, and exported 213 million tons. Deputy Prime Minister of the Russian Federation Alexander Novak cited such figures on January 25, 2024.

Earlier, the Deputy Prime Minister of the Russian Federation cited an estimate according to which coal production in Russia in 2022 amounted to 443.6 million tons, and exports - 210.9 million tons. Thus, at the end of 2023, production decreased by 1.26%, and exports increased by 1%. The Ministry of Energy of the Russian Federation predicted that coal production and export by the end of 2023 will remain at the level of 2022 - about 440 and 220 million tons, respectively.

In 2023, Russia mined 438 million tons of coal

According to Alexander Novak, almost 52% more coal was exported to China in 2023, and 43% more to India compared to a year earlier. In the coming years, coal exports from the Russian Federation will be maintained at the level of 220 million tons per year due to increasing global demand. China, India, Turkey will remain the main importers of Russian coal, the Deputy Prime Minister predicts.

The Ministry of Energy of the Russian Federation previously reported that by the end of 2023, the export of Russian coal to China could exceed 100 million tons. At the same time, in the first nine months, Russia supplied 76.5 million tons of coal to the PRC, and 21.3 million tons to India.

According to him, the efforts of the Russian government and coal companies are aimed at further reorienting the export of Russian coal to the Asia-Pacific countries. To do this, new fields are being introduced in the East, and the railway and port infrastructure is expanding. Also in 2023, coal shipment through western ports to both consumers in Africa, the Middle East and the Atlantic, and countries in the Asia-Pacific region, Novak emphasized in an article for the Energy Policy magazine^[3]

2022

The volume of coal production and its agglomeration products - 570 million tons

Coal production in Russia in 2022 amounted to more than 570 million tons and remained at the level of 2021 despite Western sanctions against the Russian Federation. This is stated in the study of the analytical company AnalyticResearchGroup. Excerpts from this report were published on November 20, 2023.

The largest share (about 84% in 2022) in coal production is coal. In second place is brown coal (15%). Less than 0.1% of annual production came from the production of coal and charcoal agglomeration products. The entire list of products analyzed in the study is as follows:

• coal and its agglomeration products;
• coal;
• anthracite;
• coking coal;
• coal except anthracite, coking and brown coal;
• enriched coal and anthracite;
• brown coal (lignite);
• coal agglomeration products;
• charcoal.

According to researchers, coal production in the Russian Federation in 2022 was supported by demand from Russian and foreign enterprises. Although coal exports from Russia, taking into account the impact of restrictive sanctions, European Union according to industry experts, decreased by 7.5% in 2022, a gradual reorientation of export supplies to Asian countries began. Thus, the volume of shipments in favor China in 2022 increased by 11%, and in - India by about 150%.

At the same time, analysts point to a decrease in Russia's export potential in the coal market. This is due, in particular, to the growth of own production in Asian countries, which are the largest consumers in the market. So, in 2022, China increased production by 7%, to 6.36 billion tons, India - by 11%, to 1.02 billion tons, and Indonesia - by 9%, to 582 million tons, the researchers add.^[4]

Production growth by 0.3% to 442 million tons

Coal production increased in Russia in 2022 by 0.3%, to 442 million tons. This is actually a record level equal to the level of 2020, while export supplies decreased, taking into account EU sanctions, by 7.6%.

2020: Reduction in coal production by 9.2%, to 401.37 million tons - TsDU TEK

Coal production in Russia at the end of 2020 decreased by 9.2% and amounted to 401.37 million tons. This is evidenced by the data of the Central Dispatch Department of the Fuel and Energy Complex (TsDU TEK, a branch of the Federal State Budgetary Institution "REA" of the Ministry of Energy of Russia).

Russian coal supplies to the domestic market in 2020 reached 165.42 million tons, down 8.6% compared to 2019. Exports of Russian coal increased by 0.9%, to 195.09 million tons.

According to the calculations of experts from the Central Control Department of the Fuel and Energy Complex, the production indicators of the largest coal companies in January-December 2020 were as follows:

• SUEK - 101.179 million tons of coal (a decrease of 4.7%);
• Management Company Kuzbassrazrezugol"" (included in) UMMC - 40.055 million tons (a decrease of 5.9%);
• SDS-Coal HC - 20.191 million tons (-17.8%);
• Vostsibugol - 12.906 million tons (-12.4%);
• South Kuzbass Management Company (part of Mechel) - 10.402 million tons (+ 19.7%);
• HC Yakutugol (part of Mechel) - 5.546 million tons (-5%).

Coal production in Russia in 2020 decreased by 9.2%

According to experts, the coal industry COVID-19 was experiencing problems even before the coronavirus pandemic due to low prices and the refusal of a number of European consumers to purchase power coal. The pandemic also collapsed prices for which gas coal directly competes in generation.

It is noted that in recent years, the main condition for the growth of coal production is the growth of its export supplies.

Regional structure of coal exports from Russia in 2020

The supply of coal to the domestic market over a long period fluctuates at about the same level due to its competition with gas.

The International Energy Agency (IEA) expected an 8.3 percent decrease in coal production in Russia at the end of 2020 and linked its forecast to a decrease in domestic demand, especially at power plants, and a decrease in demand in the main export markets for thermal coal, that is, in Europe and South Korea.

The Russian energy strategy, adopted in June 2020, assumes an increase in the annual volume of coal production to 448-530 million tons by 2024 and to 485-668 million tons by 2035.^[5]

2017: Production growth by 6%, exports by 12%

In January-December 2017, coal production in Russia increased by 6.3% (407.8 million tons).

In the context of inter-fuel competition with gas, the demand for coal in the domestic market in 2017 showed weak positive dynamics (+ 1.0%).

The main driver of production is exports, which grew by 12.4% to 185.1 million tons. Export growth is mainly due to the high level of demand from China and South Korea.

At the end of 2017, for the first time in history, loading coal for export exceeded loading in domestic traffic (192.2 million tons against 168.9 million tons).

Total coal shipments on the railway network increased by 9.1% in 2017: in the domestic market shipments grew by 1.0%, while exports grew by + 17.3%.

The volume of coal transshipment in the period January-December 2017 in Russian ports increased by 13.4% to the level of 154.4 million tons.

Certain risks for the coal industry and coal terminals present prospects for tougher measures to combat dust during coal transshipment.

In the foreign market, thermal coal prices in December 2017 (FOB Newcastle/Port Kembla) increased by 18.4% compared to December 2016 to the level of $102.16/t ($86.32/t in December 2016).

See also

• Oil production in Russia
• Gas production in Russia
• Russian economy

Notes